Committed to grow the right way: Oyo responds to reports of irregularities

Oyo says it is investing in technology to ensure reconciliations happen faster and expects all owners to partner in delivering superior guest experience

Oyo on Friday responded to the New York Times piece that reported irregularities and dubious business practices at the firm that offers budget hotel rooms, saying it was committed to growing the company “the right way”.

“We work hard every day to ensure that our values are upheld by thousands of committed employees around the world, and we are subject to regular external audits to ensure proper compliance and adherence to our code of conduct. With regards to complaints of a small section of property owners in India whose payments are disputed, multiple escalation mechanisms exist and we continue to provide resolution,” said an Oyo spokesperson.

The NYT piece had reported, based on interactions with over a dozen current and former employees, that thousands of rooms listed on the Oyo platform were from unlicensed hotels and guest houses, and the company had imposed extra fees on hotels and refused to pay hotels the full amounts they were owed by it. 

“We are also investing in technology and in building stronger partner support teams to ensure reconciliations happen faster. We expect all hotel owners to partner in delivering superior guest experience. We will also continue to utilise the provisions in our contracts that allow us to incentivise and recognise thousands of owners who consistently deliver a high-quality guest experience,” the spokesperson said.

Sources in the know said while there had been a lot of acceptance for the perks of the business such as chic-looking buildings, well-trained staff, higher occupancies, and increased customer loyalty and repeat, there was also resistance to dynamic pricing, franchise fees, high benchmarks of quality, safety, and reliability. 

“At Oyo, we often refer to this as an occupational hazard, that one has to work with keeping in mind the larger picture — over 18,000 asset owners in India alone choosing and growing with Oyo. This year alone, we have had over 642 asset owners, with hotel sales over Rs 1 crore each, a stark increase from their earnings before becoming a part of Oyo,” this person said.

While the NYT story pointed out more irregularities, including giving rooms free to police and other officials, the most shocking perhaps is the charge that Oyo executives and legal team helped hush up a rape charge by a guest staying at a Noida hotel last year.

According to sources quoted above, Oyo relies on a slew of technology and physical measures to ensure employee and guest safety. Among these was hiring a chief of safety officer and emergency response director at a national level.

It also launched an in-app SOS button feature that enables a guest to inform Oyo Safety Response Team or the police about any emergency.

“There is always sufficient lighting inside and outside a hotel and in the parking area with CCTV cameras being maintained in common areas,” said this person. However, they did not address the issue of the rape allegation directly.